Miller v. Fowler
424 P.3d 306
Alaska2018Background
- In 2009 Miller bought an 8-unit Anchorage apartment building from Fowler, financing most of the purchase with a promissory note secured by a deed of trust. Fowler was a licensed broker and provided the required written property disclosure referencing past sewer problems and tenant misuse.
- After purchase Miller experienced recurring and worsening sewer backups; by August 2012 camera inspection revealed extensive pipe damage and roots. Miller spent substantial sums pursuing a sewer reroute and permitting but ran out of funds.
- Fowler agreed to multiple loan modifications reducing payments and principal conditioned on Miller producing proof of completed sewer repairs and municipal inspection by December 20, 2012. A final (handwritten) modification in November 2012 deferred payments until June 2013 and provided an $80,000 principal credit upon completion/certification of sewer upgrades (referencing permits).
- In May 2013 Fowler declared the modifications void and initiated nonjudicial foreclosure, asserting Miller had missed payments since September 2012. Miller sued in August 2013 alleging wrongful foreclosure, misrepresentation, breach of duties, fraud, and related claims; Fowler counterclaimed for foreclosure.
- The superior court granted summary judgment for Fowler on all claims rooted in pre-sale misrepresentations as time-barred, denied Miller leave to amend mid-trial to assert unilateral mistake, and later found Fowler did not wrongfully foreclose because Miller had defaulted for failing to meet a December 20, 2012 deadline.
- On appeal the Alaska Supreme Court (1) reversed the statute-of-limitations summary judgment, (2) vacated the wrongful-foreclosure judgment because the superior court misinterpreted the modification and improperly refused to consider extrinsic evidence, and (3) affirmed denial of the mid-trial amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether claims based on pre-sale misrepresentations were time‑barred (discovery‑rule accrual) | Miller: discovery rule delays accrual until he knew or should have inquired; material facts create dispute about when inquiry notice arose. | Fowler: claims accrued at or near the 2009 sale and are beyond limitations. | Reversed summary judgment; genuine dispute whether a reasonable person was on inquiry notice before limitations cut‑off, remand for factfinding. |
| Whether the third loan modification implicitly required repairs by Dec. 20, 2012 so Miller was in default and foreclosure was proper | Miller: the third modification did not condition payment deferral on the Dec. 20 deadline; extrinsic evidence supports parties’ intent. | Fowler: modification should be read to include the earlier Dec. 20, 2012 deadline; Miller failed to meet it and defaulted. | Vacated superior court’s ruling for misinterpretation and improper exclusion of extrinsic evidence; remanded to reconsider with extrinsic evidence. |
| Whether superior court abused discretion denying mid‑trial leave to amend to assert unilateral mistake | Miller: defense arose from testimony elicited at trial and amendment was justified despite tardiness. | Fowler: amendment was unduly delayed and would be prejudicial given timing (mid‑trial) and lack of opportunity for discovery. | Affirmed denial; the court did not abuse discretion given undue delay and prejudice to Fowler. |
Key Cases Cited
- Kelly v. Municipality of Anchorage, 270 P.3d 801 (Alaska 2012) (summary judgment standard and de novo review)
- Palmer v. Borg‑Warner Corp., 818 P.2d 632 (Alaska 1991) (discovery‑rule accrual and summary judgment caution)
- Mine Safety Appliances Co. v. Stiles, 756 P.2d 288 (Alaska 1988) (inquiry‑notice formulation of discovery rule)
- Bauman v. Day, 892 P.2d 817 (Alaska 1995) (fraud discovery principles; inquiry notice does not require proof of scienter)
- Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264 (Alaska 2013) (encouraging evidentiary hearing before summary judgment on limitations accrual)
- Pedersen v. Zielski, 822 P.2d 903 (Alaska 1991) (statute‑of‑limitations accrual fact‑intensive analysis)
- Nautilus Marine Enters., Inc. v. Exxon Mobil Corp., 305 P.3d 309 (Alaska 2013) (contract interpretation focuses on parties’ reasonable expectations)